TOLEDO, OH (WTOL) - The most recent banking crisis has potential home buyers very nervous. But the word is that if Fannie Mae and Freddie Mac need help, the government will step in. After all, they own or guarantee almost half of all home loans in the U.S.
But, again, this is making it tough on investors and many who are trying to buy a home.
"It used to be say, when you went to Fifth Third Bank and you got your loan there, every month you went to make your payment there. That's not the model anymore. Somebody buys that investment," says Keith Foster, Air Housing Center of Toledo.
In many cases, Fannie Mae and Freddie Mac buy that investment, supplying money for mortgages. That supply is backed by shareholders. It's the way many banks are able to offer lending and loans.
"Certainly a homeowner that has a loan that Freddie and Fannie own right now, this isn't going to change at all to them," Foster says.
Some say it's lending that is undergoing a big change.
"What it means is, it's going to be very hard to purchase a home this day and age," says Renea Wilson, a loan officer with WOH Development who says lending is changing just about every day.
"You can't do the hundred percent financing anymore. You're going to need a minimum of three percent, sometimes five percent. It all depends on the PMI companies, the private mortgage insurance companies, that are willing to insure you," Wilson says.
The White House and Federal Reserve have proposed a housing rescue package to help these companies weather the storm. Congress will have to approve it.
Meantime, if you're a qualified buyer, experts say the time to buy is now.